Legal Technology Journal

Interwoven is being sued by a group claiming that the company’s directors breached their fiduciary duties to stockholders by approving the merger with Autonomy.

The merger was announced last week (21 January) and on 26 January a putative class action lawsuit was filed in the Court of Chancery of the State of Delaware against Interwoven and its directors.

The case is being brought by City of Roseville Employees’ Retirement System, and alleges that Interwoven’s directors engaged in self-dealing, failed to properly value Interwoven, disregarded alleged conflicts of interest and that the merger was the product of a flawed process designed to ensure the sale to Autonomy and subvert the interests of Interwoven’s stockholders.

The complaint seeks an injunction to stop the merger going ahead, a declaration that the directors must exercise their fiduciary duties to obtain a transaction that is in the best interest of stockholders, and costs.

Interwoven stated: “Based on our review of the complaint, we believe that the claims are without merit and intend to vigorously defend against them.
“However, there can be no assurances that we will be successful in such a defense.”

Autonomy issued a statement saying: “It is fairly standard for people in the U.S. to file things like these when deals are announced. We have seen it happen before and never come to anything.

“We are not concerned at all at this time in relation to the deal, but of course will keep a close eye on it.”